As interest rates increase, more and more people are looking to their credit cards to support them during times of financial difficulty.
However, credit card consumers are discovering that debt breeds debt as they struggle to meet repayments. In the first half of this year, over 4 million repayments were missed, resulting in penalty charges that exceeded £50,000,000.
The consequences of these missed payments are more far-reaching than some realise, with consumer credit ratings being affected negatively for up to three years. In turn, these consumers then find it harder to borrow or take loans and can pay much higher rates of interest, as creditors view them as high-risk borrowers.
Unfortunately this system, which was designed to offer the consumer a way in which to support their lifestyles beyond their immediate means, can, if not carefully managed, have directly the opposite effect.

Many of those unable to meet repayments and penalty charges are now faced with a spiral of debt with no obvious escape route.
However there are those who use remortgaging as a tool by which to free themselves from debt, consolidate all monthly payments, and also reverse the negative effects on their credit ratings.
A mortgage broker specialist in remortgaging with bad credit can arrange a mortgage product that best suits your repayment ability. These repayment schemes are designed to reflect the financial circumstances of a given homeowner, sometimes with designated ‘repayment holidays’.
This allows funds resting in bricks and mortar to be used directly to pay off mounting debts – such as those from missed credit card repayments – and gradually reverse the spiral of debt and also repair the damage done to a credit rating by bad money management.

It would seem that the credit card may have a serious rival in terms of using funds to support a lack of immediate finances.